What insurance do you need for a cleaning business? General liability insurance, work accident insurance, property insurance, and cleaning bonds protect your cleaning company from financial liability. Learn about the types of insurance your business needs to protect your bottom line.
A Person Mops In Front Of A Wet Floor Warning Sign.
Whether you’re considering starting a small cleaning business or looking to grow, it can be easy to get carried away with all the things you need to do before you can get started. What is your specific business idea? How will it be structured? Has your small business loan paper been filed? With so much to review, insurance may be furthest from your mind.
Whether you are a sole proprietor or have a team of employees, the right small business insurance can provide financial protection and peace of mind for your cleaning business.
Why Do You Need Cleaning Company Insurance?
Most likely you started as a sole proprietor or you are about to start your home cleaning or maintenance business which is the easiest business structure for beginner entrepreneurs. This means that any trading losses will affect your checking account.
For example, imagine that someone sues your company for a slip and fall accident, and the court orders you to pay thousands of dollars in damages and legal fees. Without small business insurance, you would have to pay for it out of pocket.
Insurance helps you market your business
Insurance is much more than financial protection. It also strengthens the stability of your business. In addition to insurance, cleaning bonds are a way to show customers that they can trust your company with their valuable properties.
What Insurance Do You Need For A Cleaning Business
Let’s take a look at the different types of cleaning insurance policies that can protect your business at every stage of its development:
General liability insurance: the lifesaver against slips and falls
Known as “slip and fall insurance,” general liability insurance is critical for any small cleaning business.
In your industry, the risk of falling, tripping, and slipping is very real. If your customer’s visitor slips on your freshly waxed floors, your customer could be sued for damages. That customer, in turn, can blame your cleaning company.
Then general liability insurance can offer a solution. Also known as commercial general liability, this policy covers you when your company is sued for:
Physical injuries to third parties (those sustained by a non-employee)
Property damage on a construction site (for example, an employee uses the wrong solution while mopping the floor of a customer’s house)
Advertising damages (for example, posting a defamatory statement about a competitor on social media)
Business owner policies: why two policies are better than one
You have probably already invested a significant amount of money in your business.
For example, you probably bought commercial cleaning equipment such as vacuum cleaners, polishers, personal protective equipment, and cleaning supplies. Or maybe you have bought or rented a corporate office.
This means you have physical investments that need protection, which is where business property insurance comes in.
Company property insurance will pay for the replacement or repair of your insured cleaning equipment if it is lost or damaged as a result of:
- Heavy weather
You can buy your property insurance, or you can bundle your property and general liability coverage in a business policy (BOP). By combining these two policies into one BOP, you can save money on your premiums.
Employee Compensation Insurance: Employee Care and State Law Compliance
Injuries are common among cleaning workers and it is your responsibility to ensure that your employees receive the medical care they need.
Cleaning companies face a variety of dangers, including:
- Biological: Diseases, bacteria, and fungi.
- Chemical: cleaning solutions
- Physical: repetitive movements, moving equipment, slip, and fall accidents
You can make sure that your employees’ medical costs don’t come out of your pocket if you have occupational accident insurance. This helps pay for:
- Lawsuits for accidents at work
- Employee medical bills and replacement wages related to accidents at work
Most states now require you to have this coverage, even if you only have one employee.
If you’re a sole proprietor, workers’ compensation can provide a financial lifeline if you’re ever injured on the job and unable to work. Your regular health insurance may not cover a work-related incident, but workers’ compensation coverage would help you with your medical bills and offset some of your lost income.
Some companies require their independent contractors to have this coverage if they work in more risky areas, such as construction and roofing.
Commercial auto insurance: Required in most states
Commercial auto coverage is similar to your auto insurance, but it covers vehicles owned by your company. It is now mandatory in most states.
If you or an employee is at fault in an accident while operating a commercial vehicle, the repairs, legal bills, and injuries could cost you a fortune. Commercial auto insurance helps cover these costs, as well as vehicle theft and damage from events such as vandalism and severe weather.
Rented and Non-Owned Car Insurance: For personal vehicles at work
If you or your employees use personal, leased, or leased vehicles for work, you will need HNOA (rent-non-property) insurance to protect yourself financially.
HNOA insurance provides financial protection against the costs of accidental damage, including lawsuits and medical expenses. Covers vehicles that your company can rent or your vehicle when it is used for work.
Your car insurance will cover you while you drive to work, but not while you are at work. If you or an employee has an accident while doing work-related errands, such as picking up supplies, you need HNOA coverage to be financially protected.
Commercial general insurance: an extra layer of financial protection
One of the cheapest ways to increase your insurance coverage is through commercial general insurance. It is essentially an insurance policy for your general liability, commercial auto, or employer liability coverage (part of your work accident insurance).
If you reach the policy limits of your liability coverage, a commercial umbrella policy would come into effect and cover any additional losses.
For example, if you face a $1.5 million claim against your general liability insurance and have $1 million in coverage, you will have to pay the $500,000 difference out of pocket. If you had a $2 million commercial umbrella policy, your insurance company would pay that $500,000 instead.
Concierge bonus: proof of the reliability of your cleaning company
Cleaning bonds (a type of bond) show potential clients that you have an insurance company that vouches for your job. It’s a great way to build trust with new customers.
When a customer sees the word ‘linked’ on your website or in marketing materials, they can rest assured that if something is stolen or broken by an employee, their voucher provider will cover the replacement cost.
Things to consider when choosing cleaning insurance
There are too many insurers, especially if you operate in a major city. However, not all insurance policies are the same. You need to find something that best suits your interests.
When it comes to business insurance, you will find that the devil is in the details.
The first thing to look at is how much the policy’s general coverage is. Liability insurance should be sufficient to cover damages incurred by your cleaning company in the event of an accident, injury, or property damage.
The cleaning industry is not regulated, so there may be no standards. However, you can quickly find out what the typical coverage is in the area you are serving.
It is important to consider which types of locations are covered by liability insurance. This is all the more relevant for commercial cleaners who work in different locations and infrastructures.
Why is this important? The Civil Responsibility Plan would only apply to the places it specifically specifies. If an accident or injury occurs elsewhere, it may not be covered by liability insurance. In such a case, your cleaning company will run into serious financial and legal problems.
Some insurance companies may not cover high-risk locations such as large commercial buildings with high foot traffic (shopping malls, hospitals, office buildings, etc.). You must ensure that the coverage covers all types of places where you usually work.
Take the time to read the insurance plan carefully. Perhaps make a checklist of all the things you want to include in the plan. It is better to prevent problems early on than to log in and find out later what is still missing in the policy.
When you receive a quote from the insurance company, ask them to send you the coverage details. When you compare plans before deciding which one to buy, it all comes down to those granular details.
It is imperative to compare plans and consider which plan offers the most at the lowest price. Even if you’re not on a tight budget, it doesn’t hurt to save some money by shopping around and seeing what options are available.
Search online for reviews from other cleaners and cleaning companies about how they rate the service.
Another important thing to consider is customer support. You don’t want to be stuck with a company that doesn’t care about its customers. Ideally, there should be 24/7 customer support in case you need urgent help.
Cleaning insurance costs
Insurance costs for cleaning companies vary widely. It may depend on the nature of the cleaning business, its size, and where it operates. For example, home cleaning insurance is often cheaper than business cleaning insurance.
Your biggest expense is liability insurance, which will make up a significant portion of your total insurance cost. Next comes a business insurance policy that covers your office/warehouse and your portable equipment. These can range from a few hundred to over a thousand dollars a year.
You should choose the provider based on your financial situation or needs. While the need for a cleaner is quite simple, the financial situation varies from company to company.
Most new cleaning companies don’t want to spend a lot of money on insurance. However, it is important to understand that this is critical to your business. If you get a claim that isn’t covered by your insurance, your business could collapse.
The cost of insurance also depends on the size of the company. Insurance for independent cleaners is cheaper than that of a cleaning company with dozens of cleaners and office staff.
Conclusion – What insurance do you need for a cleaning business
Cleaner insurance is an extremely important consideration, especially for a startup. Even if you have a sole proprietorship, you must take out liability insurance. A company without commercial insurance is asking to close the shop.
Accidents can happen all the time, especially with a hands-on job like cleaning. You must ensure that you are insured against possible claims.
The general advice when choosing insurance is to focus more on coverage than on the cost of the insurance. You don’t want a loophole plan to save some money.